Mr. Lidwell was very kindly took the time to give me this thoughtful, informative interview about WOWIO, his downloable free ebook company, the content of which is about half comics and graphic novels.

Ginger Mayerson: What inspired you to found WOWIO?

William Lidwell: The original inspiration came from trying to understand why textbook prices are so high relative to other kinds of books. The further down that rabbit hole I went, the more I realized that the publishing industry was ripe for revolution. WOWIO was conceived to help catalyze this revolution, and do so in a way that dramatically improves exposure and access to modern written works while also increasing the bottom-line net revenue for authors and publishers.

GM What were you doing before you founded WOWIO?

WL I sold my previous venture in 2000, which focused on e-learning. After that and up to founding WOWIO in 2005, I spent my time writing, speaking, and consulting on topics of design, management, etc.

GM Was there a business model for WOWIO?

WL The primary revenue model for WOWIO has always been based on sponsorship/advertising. There are many intrinsic challenges to such models, chief among them is achieving the threshold number of users needed to attract major sponsors. I often equate it to the building of an arch—you can't bridge the gap and place the keystone without a scaffold of some sort. So, it's a race to complete the arch before the scaffold collapses. Not to sound dramatic—this is really the nature of all new ventures. Ernest Shackleton placed a classified ad recruiting for one of his Antarctic expeditions: "Men wanted for hazardous journey. Small wages, bitter cold. Long months of complete darkness. Constant danger. Safe return doubtful. Honor and recognition in case of success." Perfect summation of a worthy startup.

GM You have some of the same titles as Rosetta Books. Were they an influence in founding WOWIO?

WL Indirectly. Arthur Klebanoff is a visionary in the publishing industry, and when we began seeking thoughtful, forward-looking e-content partners, he was at the top of our call list.

GM Have you always been in publishing?

WL I wrote my first book, Universal Principles of Design, working at a privately founded think-tank with a couple of very experienced academic textbook authors from 2001-2005. Writing UPOD and working with these authors was my introduction to the publishing world.

GM What other type of media or businesses have you been involved in?

WL Design, consulting, and e-learning.

GM Are most of your books from publishers, in public domain, or individual authors?

WL Most of our books are copyrighted (i.e., not public domain) and from publishers. We are not trying to be a commodity supplier of text-based public domain content—Gutenberg.org, and the Internet at large, have that wrapped up. Our goal is to enable a new kind of marketplace in which creators and publishers can easily and profitably participate, while readers gain access to a diversity of high-quality content for free.

And for us, the "quality" component is paramount. There are plenty of sites where you can download e-crap, and we don't want to be one of them. Nor do we believe that the message should suffer for the medium, especially when it regards the classics. The few public domain titles we do have on WOWIO (e.g., The War of the Worlds), have all been professionally edited, designed, and produced, with the appropriate attention given to layout, type, imagery, etc. We work hard to do these great works justice through design, and in my opinion they are the finest editions you will find in print or digital form.

GM WOWIO has, to me, an impressive list of comics. Do you approach creators or do they find you?

WL Both, though creators are increasingly coming to us—word spreads fast in the comic community. We plan to approach a few of the major comic book publishers in 2008, but given the fragmented nature of the industry and the immense talent out there, we will continue to focus most of our efforts on enthusiastically supporting and receiving niche and independent comic book publishers.

GM Roughly how much of WOWIO's list is in comics or graphic novels?

WL It is about 50:50.

GM There is often much discussion as regards what can be done to jumpstart the comics industry and increase sales. What do you think would be a positive step that in your opinion would benefit the industry?

WL WOWIO

GM How is it your books are free and you're still paying the rent?

WL Sponsors are the primary source of revenue. This will soon be supplemented by a variety of other programs, like subscriptions, ebook gifting, etc. Our goal is to achieve a win-win-win for WOWIO readers, sponsors, and publishers—i.e., readers have access to ebooks for free; sponsors get opportunities to establish valued relationships with readers; and authors, artists, and their publishers get fair compensation for their work.

GM What is the creator revenue from each download?

WL In terms of compensation, I believe we are leading the digital world. In the fourth quarter of 2007 alone, we paid out more than $500,000 in royalties. We regularly hear from our content partners that they make more through WOWIO than through any of their other digital channels of distribution—in some cases, more than all of their digital channels combined. The 2008 royalty rates are fifty-cents per download for books, and 25-cents per download for comics. These rates will be adjusted downward as the number of users grows, but the net effect will continue to be a significant opportunity for creators and publishers to receive incredible exposure and compensation for their work.

GM How are most of your customers finding WOWIO? I read the No Need For Bushido" webcomic and ran right over to get their ebook when it was published.

WL As you did. We have conducted a few promotional campaigns, but the overwhelming majority of new readers have come through the sites of our content partners or through referrals from their friends.

GM Why couldn't I use my yahoo email to register and what do you do with the information from registrations?

WL Two reasons: (1) WOWIO accounts require that you agree to the terms of a licensing agreement. Since an agreement is only meaningful when it is between two real parties, we require that people offer some proof that they are who they say they are; (2) every WOWIO ebook contains watermarks that allow us to identify the user who downloaded it. If readers can sign up from an account that permits anonymous registration, neither the license agreement nor the watermarks do much to protect the intellectual property of our content partners. Now, nobody is worried about the friend or family member occasionally sharing a book, the concern regards egregious violations, like sites dedicated to illegal file trading, etc.

Unfortunately, given the rise in identity theft on the Web, we know the current registration method is wildly unpopular with many readers—we hear from them every day about it. Accordingly, we have been working hard to develop alternatives that will enable us to continue to protect the intellectual property of our content partners while also allowing readers with Gmail, Hotmail, etc., to participate. I am pleased to report significant progress on this in the last couple of months, and that we will be making some major changes to the registration process in March 2008 that will allow readers to register with any email address and minimal hassle.

GM What's next for WOWIO and you?

WL More great content from both niche and mainstream publishers. We are actively building our catalog and expect it to at least triple in size in 2008.

As for me, I am working to finish up my next book, Deconstructing Product Design, with Rockport Publishers. Otherwise, I am laser-focused on WOWIO until it is out of "toddler" stage—when it reaches a "stable adolescence", then I will think about what's next.